'Lean Startup' Advice: Think Big, Start Small

Small startup companies have an advantage, says author Eric Ries: they can test innovative ideas quickly. Here, workers in London talk at TechHub, an office space for technology entrepreneurs.

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Some of our best ideas supposedly come to us in the shower: a business to start, an industry to shake up. Or maybe not, says entrepreneur Eric Ries.

"When we're in the shower, when we're thinking about our idea — boy, does it sound brilliant. But the reality is that most of our ideas are actually terrible," he says. "But it's hard to know which are the brilliant ones, and which are the crazy ones, until we actually test them against reality."

Ries, who runs the popular blog Startup Lessons Learned, has sought to collect good ideas about how to start a business. And he describes them in his new book, The Lean Startup, about innovation in an evolving marketplace.

One of his suggestions is that it's OK to put a totally unfinished product out onto the market. And not only is that OK, he says — it's actually better.

"It's a really paradoxical thing," he says. "We want to think big, but start small. And then scale fast."

As an example, he cites Facebook, which has gone from obscurity to ubiquity in less than a decade.

"We have a tendency to see the world the way it is, and to think it will always be that way," Ries says. "Facebook actually faced very stiff competition from the now-forgotten market leaders at that time."

The social network service's strength, he says, is that it had the best growth model, one which allowed the company to surpass its rivals very quickly.

It's also easier to innovate at small companies that lack the rigorous planning of a large corporation, Ries says. And that holds true not just for startups in the tech world, but for entrepreneurs who have a great idea for a new product.

And these days, Ries says, young companies don't even have to build a factory to create their products — they can just take part in what he calls "the rentership of the means of production."

"Even if you want to build a physical device," he says, "you can just build a computer schematic of what you want, and there are manufacturers now who will send you a batch of, say, 40 of those, at a very low cost."

That process can allow young companies to compete with large, established corporations.

"The truth is, we actually have more stuff than we know what to do with," Ries says. "So, building more of it, more efficiently, actually doesn't help. We have to be focused on the efficiency with which we can test new ideas — to discover which are brilliant, and which are crazy."

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